Thursday, December 14, 2006

Average Government Employee Wages Almost 50% Higher Than The Private Sector

Wow. September's private industry employer compensation costs were $25.52 per work hour, on average. For state and local governments, the figure is $37.91. (Source.)

[Thanks to crossroadsinitiative.com for this picture of someone who, to be fair, is probably not a government worker; in fact he has probably just pulled an all-nighter.]

Those wage stats almost need no further comment, but you may be curious to know what accounts for the difference. Here are some more details:

Private Industry:

Average wages and salaries: $18.04/hour, 70.7% of $25.52Benefits: $7.48 (29.3%)

State/Local Government:

Average wages and salaries: $25.53, or 67.3% of $37.91Benefits: $12.38 (32.7%)

Another interesting fact or two:

State and local government management and related occupations earned $46.66 on average, while the private service sector equivalent earned $28.72. Sales occupations earned only $25.85 at this higher level of paycheck.

I can look for some market reasons for this imbalance, but they all fall through. For example, higher compensation is usually required when jobs are unpleasant or difficult. I doubt this is the case around those padded desks and cushy chairs. Is it hard to attract and keep employees? My information says no, they tend to hang on for life. Do the jobs require a greater degree of education than the private sector? Not in general, and obviously not at the entry level, as our collective observant eye has noted at your local DMV, immigration, unemployment or social security office. Are the working conditions dangerous? Well, I don't think so, although I suppose you never know.

What I do know are three factors: (1) Government workers are unionized to some degree, even though they seem to be the last who would need it.

(2) The government enterprise does not fit into the usual free market wage competition scenario, because there is no end requirement for profitability.

(3) Your and my tax dollars are an infinite source of compensation dollars, and we don't demand a balance sheet before buying government services. Remember: The various levels of our governments serve us; we are not their slaves. We "buy" their services. I know that seems odd, given that you must acquiesce to the extortion of your paycheck out of your clenched fist. It's one of those odd paradoxes of life.

Not requiring balance sheets from our government sector is a serious mistake on our part. Governments' feet should be held to the fire of balanced budgets, tax increase barriers and quasi-market standards of income and expenditure limitations, although I suppose we could dispense them from having to show a profit -- and then again, why should we? The money could pay off borrowing expenses.

1 Comments:

Timely post. Our local newspaper recently sued the city because they refused to release payroll information. Information that was supposed to be public.

Actually I saw a few issues with the lawsuit, as the paper actually wanted names with dollar figures attached to them. Personally I wouldn't want my name and income printed in the newspaper, and I don't think that's what the police and firefighters opted for when they took their jobs.

It turns out that a handful of them, with lots of overtime, made six figures. They should have gone to work for Goldman Sachs instead, eh? Eight figures, and no dead bodies to deal with.

I was just upset at the loss of taxpayer money fighting, losing, then appealing and losing this case.

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About Me

I maintain that a sense of humor comes right after air, water, food and shelter in the list of essentials for human thriving.
As to the inspiration for the title of this blog, there are two. First, read about economics' multiple personality disorder in my 7/2/05 post. Second, I like the story of 16-year-old Sybil Ludington who lived back in colonial America. Late at night on a rainy April 26, 1777, word came to the house of her father, a colonel in the militia, that the British were attacking and burning a local village. To stir the militiamen to battle, she jumped on her horse Star and rode for dozens of miles over unlit muddy forest tracks, not far from British troops, banging with a stick on every homestead door. This blog is my stick and my Star, carrying a bit of humor and lucidity into the dry, murky and pretentious cacophony of economics. (See my original posts for more.)